Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Newmont Mining(NEM) & Newmont Gold(NGC) -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (327)	8/14/1999 12:41:00 PM
From: ahhaha	Respond to of 587

I'm surprised that no enterprising student looking for a PhD thesis didn't ask me about applying Lagrangian dynamics to the wealth cycle. It's far better than standard econometric linear models of GNP for interpreting cycles. The machinery of econometrics can be applied in an appropriate fashion after a solid theory is in place. Econometrics is heuristic intensive very much like the ersatz Standard Model of micro physics, but just like the Standard Model is a measure a fortiori, econometrics can be applied with great success to determine what is the instantaneous wealth rate, amplitude, and phase. Those are the most important quantities in economics to measure. In contrast to what a student could do, look what the FED is doing. Aside from maintaining the "add need" to keep fed funds from rising they did a coupon pass yesterday. The only possible explanation is that they are fearful that GNP may slow and that means the dollar falls. If the dollar falls, it's good-bye stock market. Effectively the FED has to get stock prices back up and so the bear market rally has a ways to go. We should see more coupon passes as the belated attempt to maintain pseudo-prosperity proceeds. At this point these efforts engage price increases more than they do output increases. The total effect still favors GNP. We haven't arrived at the inflexion point yet. It is interesting that earlier in the week McTeer, a Fed president, expressed the ever-devolving FED comprehension of the wealth cycle by stating that the best or only indication of future inflation is what inflation is doing currently. This has several implications. It represents a concessionary attitude or adaptation to a state of acceptance of ever higher inflation rates. There is no stationarity in his view of inflation because they are reacting to their own actions of the past. This is backward looking and it is why during the '70s the situation got out of hand. The problem is that what they're trying to do is impossible. They have no chance to succeed. They're flying by the seat of your pants and they don't have the experience of those in the past who learned the hard lessons to direct them away from their current folly. Targeting interest rates to control what interest rates in the past did to create the present is random policy and borders on the absurd. The other implication is that McTeer is dropping a hint that FED won't be tightening 8/24/99. This coupled with overt injections should propel the stock market upward well into September. Meanwhile the dollar should rally as the public re-discovers that the bull market is back and so there will be early bull market down side pressure on the true beneficiaries of this part of the wealth cycle. Surprisingly gold will hang in tough as doubt stays high and traders take profits. Gold falls all the way up.

To: ahhaha who wrote (327)	8/14/1999 2:59:00 PM
From: Ken98	Read Replies (1) \| Respond to of 587

<<When a wave is prevented from undergoing its natural efficient movement between points in time, the conservation of total energy comes into play and a giant debt well is formed.>> For over 50 years the National Park Service managed Yellowstone Park in the same manner as the Fed is presently managing our economy - every minor brush fire was extinguished to preserve the verdant beauty of a national treasure. The now obvious unintended consequence of which was to create a tinderbox of dead and dying trees. When the ensuing conflagration occurred it was much more severe than what would have occurred if the normal 5-10 year fire was allowed to run its course. The resulting fire was of an unprecedented size and so intense in some areas as to render the soil sterile. The net positive of the Yellowstone experience was to gain a better understanding of the positive benefits of smaller, periodic fires on the ecosystem. These eliminate dangerous, unproductive undergrowth and provide essential nutrients for new growth. "Playing God in Yellowstone" by Alston Chase is an excellent good book describing the misguided management efforts of the Park Service and their unintended consequences - I would highly recommend it. At some point years from now a similar book will be written about the Fed and its activities. The road to hell..... Regards, Ken.